SAO PAULO – Brazilian police searched on Wednesday the headquarters of Koninklijke Philips in the South American country and conducted other raids as part of an investigation into suspected fraud in the Rio de Janeiro state health system, officials said.

They also arrested two individuals linked to that Dutch multinational technology company, including Daurio Speranzini Junior, who currently is the CEO for Latin America at General Electric Co., a conglomerate headquartered in the United States city of Boston.

The arrests and raids took place within the scope of a Federal Police operation aimed at dismantling an alleged cartel set up to manipulate tenders and fraudulently secure contracts to supply medical equipment and hospital materials in Rio de Janeiro state.

A total of 22 arrest warrants have been issued and more than 40 search warrants were executed in the states of Rio de Janeiro; Sao Paulo, where Philips’ headquarters in Brazil is located; Paraiba; Minas Gerais; and the Federal District (the capital, Brasilia).

Speranzini is under investigation for alleged criminal actions that occurred when he was the head of Philips Medical Systems in Brazil.

But prosecutors say he continued to enter into fraudulent deals involving the Rio de Janeiro Health Secretariat after assuming his new role at GE, whose offices in Brazil were not searched on Wednesday.

Authorities also arrested a Philips sales employee, the Dutch company said in a statement, which noted that no members of its current leadership team were targets of the police action.

Prosecutors say the cartel was made up of at least 33 companies and was led by Rio de Janeiro-based medical equipment distributor Oscar Iskin, a company owned by Miguel Iskin.

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